Universal Basic Income

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What Is Universal Basic Income?

Universal Basic Income, often abbreviated UBI,  is a government-sponsored program in which every citizen or eligible resident would receive an unconditional flat monthly payment. Their income, employment status, or productivity levels would not be taken into consideration. The purpose behind this type of universal payment is to reduce the cost of living stress faced by a country’s residents, which would allow them to focus on education, improving their job skills, dealing with personal matters, or other things while having enough income to meet basic living requirements. Since UBI is indiscriminate of status, it ensures every resident gets something and that nobody gets left from missing a criteria, two, or three, the way other payments or programs do. In the most common UBI implementation, identical monthly payments are made to all individuals. The tax system then ensures that funds are returned to the system from those with higher incomes. 

History

“No penalty on earth will stop people from stealing, if it’s their only way of getting food.”
— Thomas More

The international COVID-19 pandemic from 2019 and onward, and the significantly increased costs of living has brought more attention to Basic Income than ever before. However, the concept of it is not new. Thomas More introduced the concept of guaranteed income in his 1516 book, Utopia. Since then, many people over the centuries have advocated some form of basic sustenance. An early example would be Thomas Jefferson in 1776 who believed in giving any propertyless individual 20 hectares of land willing to farm it. A recent notable person is American 2020 Democratic presidential candidate, Andrew Yang, whose signature policy is what he calls the “Freedom Dividend“, a Universal Basic Income in the form of $1,000 monthly for every American adult.

Experiments, But No Full Commitment

Many countries from around the world have experimented with various projects and pilots. As of August 2022, there are no countries that have a permanent Universal Basic Income in place. Canada, the United States, Brazil, Kenya, France, Spain, Netherlands, Finland, India, and Japan are some of the countries that have experimented with it. In Canada, there has been 2 forms experimental income: The Manitoba Basic Annual Income Experiment (MINCOME) and Ontario Basic Income Pilot. Though the Canadian Emergency Response Benefit was not a universal income, it has highlighted numerous topics surrounding the need for a permanent basic income that does not leave anyone behind the way it did.

The Manitoba Basic Annual Income Experiment (MINCOME) was conducted between 1974 and 1979 under the joint sponsorship of Canada and Manitoba. It was geared toward measuring the results of low-income families in Dauphin and rural Manitoba. Over the four years that the program ended up running in the 1970s, an average family in Dauphin was guaranteed an annual income of 16,000 Canadian dollars. The results? Rates of hospitalizations fell 8.5%, improvements in mental health, a rise in the number of children completing high school, and more businesses started up during the time. Most notably, it did not cause people to stop working. The exceptions were new mothers and high school students. For new mothers it meant more time for them to take care of the home and children. For high school students they could finally focus on completing school to land better careers, as opposed to dropping out of school for farm and factory jobs. The results after financial security ended? Small businesses went defunct, anxiety returned, and some people even left Dauphin good. MINCOME was closed down in 1979 under the Progressive Conservative of Manitoba government of Sterling Lyon and the federal Progressive Conservative Party of Joe Clark. They cited oil price shocks, inflation, and the increased number of people seeking the assistance, more than what the project budgeted for. The results of the study at the time were not revealed, hence what led to the governments making this misinformed assumption. It was not until 2008, when Evelyn Forget revealed the results significantly positive effects it had. The papers had been previously locked away and abandoned.

The Ontario Basic Income Pilot (OBIP) was announced by Premier Kathleen Wynne in Hamilton in April 2017. The first phase to enroll participants, was successfully completed in April 2018, with full participation across the three pilot sites:

1.Hamilton, Brantford, Brant County
2.Thunder Bay, along with the Municipality of Oliver Paipoonge, Township of Shuniah, Municipality of Neebing, Township of Conmee, Township of O’Connor, and Township of Gillies
3. Lindsay

The purpose of the pilot was to test how a basic income might help people living on low incomes better meet their basic needs, while improving outcomes in the following: food security, stress and anxiety, mental health, health and healthcare usage, housing stability, education and training, and employment and labour market participation. Unfortunately, The three-year, $150-million program was scrapped by Ontario’s Progressive Conservative government, Doug Ford, in July 2018. At the time, then-social services minister Lisa MacLeod, stated the decision was made because the program was failing to help people become “independent contributors to the economy.” Predictably, the decision and statements faced intense criticism, with many particularly pointing out that the experiment did not even get time to gather results, and that the PC violated the promise to allow the program to finish. Former Ontario NDP Leader Andrea Horwath called the decision to end the project absolutely disgraceful. Some participants have spoken out about how receiving the basic income had improved their lives — and how the program’s premature termination has left them fretting about the future.

Why

At this point, a critical question must be asked: why? Why is there no country on the planet with Universal Basic Income? Why do income experiments never turn into permanent programs, despite countless factual studies, reports, and organizations specialized in basic income with massive datasheets and media, that prove its efficacy? 3 persistent reasons:

1. Excessive paranoia that nobody will work, thus causing a labour shortage.

2. There is no money to fund it.

3. It will make inflation worse

Labour Shortage Paranoia

This is by far the most common point against Universal Basic Income. If implemented it will make people not want to work because they are given free money, causing millions to quit their jobs en masse. Utterly false! Experiments in Canada and around the world have proven that a guaranteed income of the sort, made people more willing to take risks with starting businesses, or finishing school allowing them to pursue more advanced careers. The real problem at play is not a labour shortage, but a wage shortage. If businesses truly cared that much about retaining and gaining employees, they would not only raise wages, but also treat workers better. Make them feel valued. Make them feel safe. Make them feel like there is a purpose. And particularly relevant to these times of international pandemics, an option to work full-time from home, for jobs that can be done remotely. UBI allows people to have more bargaining power, which drives healthy competition for businesses to up their wages and treatment practices. Bullying, intimidating, and using demeaning tactics to get people into working is counterproductive, and creates cycles of toxic work, desperation, burnout, and resignations. The mere fact that society is more afraid of jobs vacancies going unfilled, than private pockets being topped up, is what people should really be frightened about. The real common cause of labour shortages are things such as an ageing work force retiring at a higher rate than the working population can grow, graduates taking longer to graduate or secure work, insufficient immigration levels, and others.

Too Expensive

Critics are quick to point out how expensive implementing Universal Basic Income would be. It is easy to look at the numbers and say that $50 – 90 billion in the case of Canada, or 2.8 to 3.1 trillion in America’s situation is an astronomical amount of money. Indeed it is. What critics fail to point out is that UBI money would go right back into the economy. People that previously did not have purchasing power, will now have it. The more people there are with money, the more money can be spent on goods and services. This creates jobs, economics stimulus, allows more people to focus on school to pursue more specialized careers, and a vast assortment of other benefits. UBI is not even about printing new money; rather it is about allocating existing money directly to a nation’s citizens. Redistribution of income and wealth from some individuals and businesses to citizens through social mechanism such as taxation, welfare, public services, land reform, or monetary policies is by far the easiest way to get it done. Saying it is too expensive is a lie. It is lack of political will. It is poverty and the current programs that are supposed to combat it that are extremely expensive.

Inflation

The inflation argument is based on the myth that in order to fund Universal Basic Income, the government would have to print billions of new dollars, thus making the cost of everything go up in the process. This has already been debunked numerous times, including within this write-up itself. UBI does not require an additional excess amount of money. Believers of this myth either do not even know what inflation is or intentionally deny that UBI can feasibly done through redistribution of existing money. Inflation is when the total value of currency increases faster than the total value of goods and services in the economy. This causes the price of goods and services to rise, in attempt to get that excess money spent. While in theory it sounds good, it leads to overconsumption, hoarding commodities, thus causing a vicious battle of even more inflation and consumer shortages. On the opposite side of the spectrum, deflation happens when the money in circulation remains, while there is an excess of goods and services causing the value of it to go up. Too much deflation will cause people to hold onto money, leading to a decrease in consumer spending, lowered business profits, pushing unemployment, and makes the economy shrink. Therefore, a small, consistent amount of inflation is actually good. Even if UBI were to be funded with new money, it would balance itself out because more people with purchasing power means manufacturers and businesses will be able to scale up accordingly with the good and services they offer to keep things balanced. If hundreds of billions can be printed to go to many other sources including banks, bureaucrats and CEOs, without causing inflation, this same money can certainly be redistributed in better ways. 

Inefficacy Of Existing Programs

“A one-size-fits-all cheque is not going to end the discrimination or poor workplace standards that follow around low-income workers.” — Critic
There are several things wrong with this statement. Firstly, it falls once again into the persistent myth that Universal Basic Income is a handout to make people dodge work. Secondly, it assumes UBI touts itself as the panacea for society’s problems. That is not the point of UBI. Informed UBI supporters are aware and admit that this is not point of UBI. The purpose of UBI is to ensure that nobody falls through the gaps by not meeting certain criteria. An extremely common problem with present anti-poverty programs. UBI certainly will not make poor workplace and discrimination disappear in the snapping of a finger. It will, however, give people more bargaining power to refuse terrible workplaces, and push them change their practices and pay. This will put the needed pressure on business to create a competition that aims for the top. To assume UBI is supposed to be a welfare handout that would rapidly brush problems away, akin to that of a mythical winged being scattering sparkles, rainbows, and gold is both condescending and nonsensical.

I am a single mother who has chosen to stay home to raise my children. Yes, money does help. I refuse to accept social assistance because they treat you like a criminal, the staff are vicious towards the people they serve. Period. UBI would work. The reasons people are poor are societal. Middle and upper class people seem to believe it’s a choice to be poor. Their parents raised them to ignore and have contempt towards poverty. — Anonymous Mother

While this mother’s comment obviously does not reflect how all staff or classes treat people, as some can be nice, it does highlight a significant and extremely common reality: embarrassment and stigmatization. A lot of people, whether they are rich or not, look down very heavily on people using disability and welfare programs. They view them as unproductive leeches who drain the working population’s life force and money. On top of this, these very same programs that are supposed to help people on welfare ironically keep most of them poor, known as the poverty trap. This is because the programs themselves do not even pay enough for these individuals to sufficiently meet their needs. It can be argued for welfare that it is supposed to temporary, which it is, but disability on the other hand can be either permanent or temporary. Here is where things get very distorted: When these individuals do attempt to work, they get their benefits clawed once they make a certain amount of money, which itself is not even enough for basic survival. This forces them to have to have to work reduced hours to keep the pay, but live with substandard income, or completely forgo their benefit. If the individual is disabled, this is not practical and can be rather dangerous.

Society must not bully and intimidate the disabled, poor, and vulnerable into working. It should be securing them and making sure their basic needs are properly met at all times without embarrassing and stigmatizing them.  Majority of people do not choose to become disabled. They are either born with a condition, or something environmental like an accident can cause it. Anyone could become disabled; poor, middle-classed, and rich. The difference? If a rich person becomes injured, permanent or not, they have access to top-notch doctors, often private staff, to make sure they are given the best condition at all times. On top of this, they have all their benefits and royalties that still gives them more money than some people working an entire year. The middle class and poor? Not so much. Even if the healthcare is free, they do not get the same quick access and specialized care as easily as a wealthy person could.

Let It Go

People need to let go of this mindset that every single person: healthy, bent, crooked, sick and all must work. It is unrealistic and callous. Some people are never going to work. Some people are never going to be employable. Perhaps the general definition of work itself may be problematic: going to an office or business to be told what to do under a clock and supervision. Work can take on many forms. It can be as traditionally described, but done remotely. It can also be done independently without supervision, with the individual setting the term, scope and pay; independent-contracting. Some people will never end up being useful to society in anyway at all, despite all the efforts to help them. Are these type of people the majority? Thankfully not. If that were the case, the world would not make it to this present time in history. Could it be that if some people had a guaranteed consistent income for proper sustenance, that even if they do not make a “good employee” that they might good keeper around a neighborhood? A good volunteer? Yes, people can be valuable to society in other ways than working through a job. Nobody asked to be born. Nobody asked for a price tag on food, water, shelter, and necessities. If society can make sure to put a price tag on everything, it can guarantee an income to pay for the basics. It is all a matter of will.